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How to Start a Wholesale Distribution Business

In the chain of distribution of finished goods from the manufacturer to the final consumer, the wholesale distributor plays a vital role. He is the link in the distribution chain that joins the manufacturer and the retail distributor. The wholesale distributor buys in finished goods from the manufacturer in relatively large quantities and sells the same in relatively smaller quantities to a number of retailer distributor.

Establishing a wholesale distribution business in India is very profitable and a rather convenient means of doing business. However, like all business ventures, there are some steps you have to follow if you want to set up a successful wholesale business. There are also several tricks of the trade to learn. But don’t despair, we have got everything covered in this article. So read on!

Steps in Setting up Wholesale Distribution Business

Step 1: Find a Place to do Business

This is the obvious first step, you need to find a place to do business before you start doing anything else. Assuming that you have the initial capital, look for available commercial spaces using property searching websites and also ask anybody you know who deals in real estate. If you don’t have the required capital, take the amount as a loan from a source that suits you- many banks give personal loans at low interest rates these days.

You should look for places that have a storage room in addition to the front counter. Since you are entering the wholesale business, you should always keep some stock of goods with you, while the rest can be stored in a commercial warehouse. Once you have selected an appropriate place, take in on rent instead of buying it. Also, rent an appropriate amount of floor space in an easily communicated commercial warehouse.

Step 2: Contacts

The single most important thing in business other than the initial capital is contacts. You need to know the right people to get distribution contracts and you need to have the means to have access to the right people. Mostly, this involves a fair amount of luck and a lot of patience and perseverance. The important thing to do here is not to be shy. Dig up distant relations who have ties with manufacturing companies.

It doesn’t matter what post they hold there, or whether they work there at all; if they have any kind of relation to any good manufacturing company, go and ask for their help. Sure, you might be refused several times, but you are bound to hit gold pretty soon if you keep this exercise up. The same thing goes for developing retail contacts. The trick is to use all your resources, no matter how outlandish they might be in the normal scenario. Business is all about taking hold of opportunities as and when there is a chance of their arising.

Step 3:Logistics

This cannot be stressed enough. If you are going to be a wholesale “distributor”, you need to have a solid logistics system- both inbound and outbound. Although some manufacturers might deliver their products to your warehouse themselves, most will prefer that you pick their products up from the factory and transport the shipment to your warehouse yourself. This involves some heavy vehicles such as trucks and you need to have contacts with some good truck operators in the area and hire them.

As I have previous said, the key to success in business is having the right contacts. You need to do the same thing for distributing the shipment among the retailers as they will surely want you to deliver the products to their shops. Whether you will use one heavy vehicle for retail distribution or a number of lightweight vehicles will depend on the retailers’ locations and your own cost considerations.

Tips of the Trade

Remember, in business you cannot afford to feel conceited, you cannot feel like slowing down. Doing either will eventually result in the destruction of all that you have created thus far. The key to success is to grow constantly, forge new contacts and expand your trading zones. Do not feel shy of taking up additional jobs, as things will work themselves out. Always apply common sense and you will shine. In wholesale distribution, common sense and rationality is the most potent weapon you hold.

So start your new business venture and walk on the path of success. Always believe in yourself and keep positive. Until next time!